Audit of UI lists 30 findings

SPRINGFIELD — An audit of the University of Illinois system found 30 separate irregularities, ranging from a former employee who was paid for four years after being terminated, to the failure of the university to purchase vehicles that met minimum fuel economy standards.

The 30 findings in the report, released Thursday, are down from recent years when there were as many as 47 separate audit findings.

Still, the UI's total is in most cases higher than the number of findings in separate audits, also released Thursday, of Chicago State University (29 findings) Eastern Illinois University (16), Northern and Western Illinois universities (nine each).

"From our standpoint," said UI spokesman Tom Hardy, "it's a good audit. You've got both state and federal compliance audits here. We'll take the necessary corrective actions, and have actually already begun to do so."

He said the audit "reaffirms the university's reputation for being excellent stewards" of federal grants funds.

"We are a big institution with tens of thousands of employees and tens of thousands of transactions every year," he noted. "We go through quite a few audits and inspections of how we're doing. I think overall we come out very well."

Among the findings:

— The UI paid a terminated employee $72,039 over a four-year period, including $16,906 in fiscal year 2012. Auditors said the UI acknowledged that some units did not have adequate processes in place to notify the human resources office when hourly employees needed to be terminated.

Hardy noted, however, that Michael Wiersema of Tolono, a former academic professional in the crop sciences department, had made full restitution after pleading guilty and being sentenced to two years of conditional discharge.

— A review of 40 transactions made with UI procurement cards found problems with seven of them. Although the transactions are supposed to be limited to less than $4,999, two were paid in multiple installments, circumventing the rule. Another, for $4,624, was for a charge prohibited by UI policies. Another was recorded in the wrong fiscal year and three were for purchases of equipment not tagged in accordance with university policy. The audit noted that there are 5,241 active procurement cards and that procurement card expenditures last year totaled $87.9 million.

— A review of a sample number of contracts, real estate leases and emergency purchases found a lack of adequate internal controls. Among 70 contracts reviewed, for example, 25 were never submitted to the comptroller's office; 28 did not contain the signature of the UI employee signing on behalf of the university comptroller; and 14 were executed after performance of the contract. One lease contract was overpaid by $1,000. Five artistic services contracts were procured as an emergency purchase when none of the emergency purchase conditions was met.

— The UI did not require all faculty members to submit time sheets as mandated by state law. The university accepted the finding but added, "There is ongoing dialogue with the academic leadership at each university campus regarding further implementation of this requirement."

— Not all employees who returned from sabbatical leave met reporting requirements summarizing activities, study and travel. Of 25 employees reviewed, one did not submit the report and three submitted the report 214 to 233 days late.

— The UI did not always meet requirements for reporting automobile accidents involving university vehicles. Of 101 accidents reported by the Urbana campus, 14 were not reported to the Department of Central Management Services in a timely manner.

— Not all transactions made with university travel cards were appropriate. In a review of 40 travel card transactions totaling $62,312, two transactions for $926 were prohibited by UI policies. The auditors noted that the university has 2,900 active travel cards and that expenditures totalling $4.6 million were made in the year ended June 30, 2012.

— The university does not have an adequate process to measure inventory balances at the end of fiscal years.

— A review of 25 new vehicles purchased last year (out of 138 new vehicles purchased universitywide), seven did not meet state minimum gas mileage standards for fuel economy, and the UI did not seek an exemption. The vehicles missed the 27.5 miles per gallon standard by 4.5 to 5.5 mpg.

Other, broader findings in the UI audit cited the university for not establishing adequate internal controls for assessing expense and revenue accruals at the end of fiscal year and for not having adequate procedures in place to ensure that federal projects are closed in a timely manner.

Among the 16 findings in the EIU audit were the following:

— The university did not properly capitalize interest costs related to construction of its new renewable energy center.

— It did not properly account for its student self-insurance health plan.

— EIU had not protected its computers with encryption software, increasing the possibility that confidential information could be exposed. Further, the university was unable to locate 36 computers and other equipment.

— The university did not exercise adequate control over its vehicles, including failure to adequately maintain some, not collecting odometer readings on a regular basis, and not ensuring that all university-owned vehicles had state U-plates.